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# How does a 1099-misc for 7200 reduce my retrun from receiving \$2300 to Owing \$320?

Accepted Solutions
Level 15

## How does a 1099-misc for 7200 reduce my retrun from receiving \$2300 to Owing \$320?

If the 1099-MISC is for self-employment income you have to pay both income tax and self-employment tax on the income. If you are in the 25% tax bracket, the net self-employment tax is about 12.36%.

• Income tax = 25% of \$7,200 = \$1,800
• Self-employment tax = 12.36% of \$7,200 = \$890
• Total tax = \$1,800 + \$890 = \$2,690
• \$2,300 refund minus \$2,690 additional tax = \$390 owed

Either the figures you posted are not exact, or some side effect of the added income reduced the amount you owe to \$320.

Level 15

## How does a 1099-misc for 7200 reduce my retrun from receiving \$2300 to Owing \$320?

If the 1099-MISC is for self-employment income you have to pay both income tax and self-employment tax on the income. If you are in the 25% tax bracket, the net self-employment tax is about 12.36%.

• Income tax = 25% of \$7,200 = \$1,800
• Self-employment tax = 12.36% of \$7,200 = \$890
• Total tax = \$1,800 + \$890 = \$2,690
• \$2,300 refund minus \$2,690 additional tax = \$390 owed

Either the figures you posted are not exact, or some side effect of the added income reduced the amount you owe to \$320.

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